M/S N A Enterprises Thru. Proprietor Mr. Naushad Ahmad vs. State Of U.P. Thru. Finance Secy. Ministry Of Finance Lko. And 2 Others

Held

The Court held that the petitioner's case was distinguishable from the precedent cited (Mahaveer Trading Company). The Court found from the enclosures to the instructions sent by the Deputy Commissioner, State Tax, Lucknow, that a show cause notice was issued on 14.02.2024, fixing the date for personal hearing on 28.02.2024 at 11:44 AM. The reply was to be submitted thereafter by 14.03.2024. However, the petitioner neither availed the opportunity of personal hearing nor filed any application for adjournment. Therefore, the impugned order dated 15.03.2024 was not passed in violation of the principles of natural justice in this instance. Regarding the petitioner's contention of double penalty under Section 75(13) of the CGST Act, the Court observed that paragraph 6 of the petition related to separate months for which purchases were shown and ITC credit claimed. The Court reasoned that for every return filed, a separate assessment/penalty order can be passed, even if the parties and invoices appear similar, as they pertain to different periods. Thus, the writ petition was dismissed as misconceived.

Facts

The petitioner, M/s N A Enterprises, a registered trader dealing in waste and scrap of iron and steel, challenged an order dated 15.03.2024 passed by respondent no.3. The petitioner received a show cause notice under Section 74 of the Central Goods and Service Tax Act, 2017, on 14.02.2024, with a reply submission date of 14.03.2024. The impugned order determined a tax amount of Rs. 1,45,11,258/- for CGST and SGST, along with a penalty of the same amount and interest of Rs. 98,67,656/-. The petitioner contended that they were not given a proper opportunity of hearing as per Section 75(5) of the CGST Act. The respondent argued that the petitioner failed to avail the personal hearing offered on 28.02.2024 and did not file a reply or seek adjournment, thus the order was rightly passed.

Key Issues

1. Whether the impugned order dated 15.03.2024, passed by respondent no.3, is liable to be quashed for violation of the principles of natural justice, specifically the right to a personal hearing under Section 75(5) of the Central Goods and Service Tax Act, 2017? Petitioner's contention: The petitioner argued that the order was passed without providing a proper opportunity of hearing, violating Section 75(5) of the CGST Act. They relied on a Division Bench judgment of the same High Court in Writ Tax No. 303 of 2024, Mahaveer Trading Company Vs. Deputy Commissioner, State Tax, which held that personal hearing must be offered before passing an adverse order in adjudication proceedings. Respondent's contention: The respondent argued that a personal hearing was scheduled for 28.02.2024, but the petitioner did not appear, file a reply, or request an adjournment. Therefore, the order was rightly passed ex-parte. They also contended that the petitioner has a statutory remedy under Section 107 of the Act. The respondent also submitted that the petitioner's claim of double penalty for the same act, as mentioned in paragraph 6 of the petition, was misconceived as separate orders can be passed for different tax periods.